Increased revenue segments mask the local challenges
Alien landholding licenses, taxes on property and stamp duty all account for the increases in total and current revenue in St Vincent and the Grenadines up to the end of April 30,2021, when compared to the corresponding period in the previous year.
Finance Minister Camillo Gonsalves was responding to a question in Parliament on May 14 when he gave an update on the fiscal position of the country up to the end of the fourth month in 2021.
“Our total revenue and grants is $217.7 million this year. Last year it was $202.8 million, so total revenue and grants up 7.4 per cent. Current revenue $213 million this year as opposed to $202.1 million last year, an increase…of 5.4 per cent,” he said.
For the year 2021, the government has collected taxes on property of $40.4 million as opposed to $9.9 million in 2020.
Gonsalves said alien landholding licenses collected this year up to the end of April amount to $27.4 million as opposed to $2.5 million in 2020 and stamp duty, which is also related to those large purchases sit at $15 million at the end of April 2021 as opposed to $6.75 million the previous year.
“The alien landholding license revenue from 2021 to 2020 is up over 1000 per cent and again, this is skewed…” the Finance Minister added, noting that it masks challenges being faced locally.
“The fact that the revenue is up is based largely on these one off type transactions…when you dig beyond those fortuitous payments, there are areas of weakness related to COVID. Taxes on goods and services are down almost 20 per cent. Taxes on international trade are down almost 2 per cent,” he said.
Gonsalves said capital revenue and grants is 4.7 million this year up to the end of the month as opposed to just over 660,000 the previous year.
Current expenditure in 2021 is 206.2 million as opposed to 208.3 million in 2020 while capital expenditure is 21.9 million this year as opposed to 17.2 million last year.
As at the end of April 2021, there was a surplus of $6.8 million as opposed to a deficit of $6.2 million the previous year.
The Finance Minister also said there was a primary balance of $3.3 million this year as opposed to a deficit of $6.3 million last year.
As it relates to the overall balance, there is a deficit of 10.3 million to date, which is considerably lower than the $22.5 million last year.
When asked about the factors affecting the government’s fiscal position and measures taken to mitigate or enhance these factors, Gonsalves said there have been attempts to be more aggressive in addressing tax delinquency and pursuing outstanding tax payments.
“That involves work in the courts. It also involves some tax non-payers deals on some of their arrears and the like, to try to get them in to pay at this time. We’ve obviously constrained our current expenditure as you could tell from the data,” he said.
The Finance Minister also noted that there are some vacant posts that the government has decided not to fill at this time.
“We’ve prioritised and also conversely de-emphasised certain capital projects to concentrate on capital projects that we hope will generate some employment and economic activity, and we have fast tracked some investments that involve the purchase of land, which is why you see some of the ballooning in the alien land holding and the stamp duty,” he said.